Stocks tumble to worst day in six weeks after Trump tariff action

NEW YORK (Reuters) - U.S. stocks slumped on Thursday as President Donald Trump's move to impose tariffs on up to $60 billion of Chinese imports drove fears about the impact on the global economy, fueling the biggest percentage declines in Wall Street's three major indexes since they entered correction territory six weeks ago.

Trump signed a presidential memorandum that will target the Chinese imports only after a consultation period. China will have space to respond, reducing the risk of immediate retaliation from Beijing.

But after equities recovered somewhat from earlier lows, selling pressure resumed on Wall Street heading into the close as investors fretted over the potential scale of U.S tariffs and possible impact on global trade.

"There’s too much negative sentiment right now," said John Carey, portfolio manager at Amundi Pioneer Asset Management in Boston. "It's possible that it will be rough sledding for a while. I don’t see anything on the horizon that will reassure people that things are just great."

Dow falls over 700 points after Trump announces China tariff plan

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Dow falls over 700 points after Trump announces China tariff plan

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Dow falls over 700 points after Trump announces China tariff plan

NEW YORK, NY - MARCH 22: Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) ahead of the closing bell, March 22, 2018 in New York City. The Dow Jones industrial average closed down more than 700 points on Thursday afternoon. Markets reacted to the Trump administrationï¿½ announcement of approximately $50 billion worth of yearly tariffs on Chinese imports. (Photo by Drew Angerer/Getty Images)

Traders work on the floor of the New York Stock Exchange, (NYSE) in New York, U.S., March 22, 2018. REUTERS/Brendan McDermid

The Dow Jones Industrial Average is displayed on a screen after the closing bell, over the floor of the New York Stock Exchange, (NYSE) in New York, U.S., March 22, 2018. REUTERS/Brendan McDermid

Traders work on the floor of the New York Stock Exchange, (NYSE) in New York, U.S., March 22, 2018. REUTERS/Brendan McDermid

The Dow Jones Industrial Average is displayed on a screen after the closing bell, over the floor of the New York Stock Exchange, (NYSE) in New York, U.S., March 22, 2018. REUTERS/Brendan McDermid

NEW YORK, NY - MARCH 22: Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) ahead of the closing bell, March 22, 2018 in New York City. The Dow Jones industrial average closed down more than 700 points on Thursday afternoon. Markets reacted to the Trump administrationï¿½ announcement of approximately $50 billion worth of yearly tariffs on Chinese imports. (Photo by Drew Angerer/Getty Images)

NEW YORK, NY - MARCH 22: A monitor displays the day's final numbers on the floor of the New York Stock Exchange (NYSE) ahead of the closing bell, March 22, 2018 in New York City. The Dow Jones industrial average closed down more than 700 points on Thursday afternoon. Markets reacted to the Trump administrationï¿½ announcement of approximately $50 billion worth of yearly tariffs on Chinese imports. (Photo by Drew Angerer/Getty Images)

NEW YORK, NY - MARCH 22: A trader works at his desk on the floor of the New York Stock Exchange (NYSE) ahead of the closing bell, March 22, 2018 in New York City. The Dow Jones industrial average closed down more than 700 points on Thursday afternoon. Markets reacted to the Trump administrationï¿½ announcement of approximately $50 billion worth of yearly tariffs on Chinese imports. (Photo by Drew Angerer/Getty Images)

NEW YORK, NY - MARCH 22: Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) ahead of the closing bell, March 22, 2018 in New York City. The Dow Jones industrial average closed down more than 700 points on Thursday afternoon. Markets reacted to the Trump administrationï¿½ announcement of approximately $50 billion worth of yearly tariffs on Chinese imports. (Photo by Drew Angerer/Getty Images)

NEW YORK, NY - MARCH 22: A monitor displays the day's final numbers on the floor of the New York Stock Exchange (NYSE) ahead of the closing bell, March 22, 2018 in New York City. The Dow Jones industrial average closed down more than 700 points on Thursday afternoon. Markets reacted to the Trump administrationï¿½ announcement of approximately $50 billion worth of yearly tariffs on Chinese imports. (Photo by Drew Angerer/Getty Images)

NEW YORK, NY - MARCH 22: Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) ahead of the closing bell, March 22, 2018 in New York City. The Dow Jones industrial average closed down more than 700 points on Thursday afternoon. Markets reacted to the Trump administrationï¿½ announcement of approximately $50 billion worth of yearly tariffs on Chinese imports. (Photo by Drew Angerer/Getty Images)

NEW YORK, NY - MARCH 22: A monitor displays the day's final numbers on the floor of the New York Stock Exchange (NYSE) ahead of the closing bell, March 22, 2018 in New York City. The Dow Jones industrial average closed down more than 700 points on Thursday afternoon. Markets reacted to the Trump administrationï¿½ announcement of approximately $50 billion worth of yearly tariffs on Chinese imports. (Photo by Drew Angerer/Getty Images)

NEW YORK, NY - MARCH 22: Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) ahead of the closing bell, March 22, 2018 in New York City. The Dow Jones industrial average closed down more than 700 points on Thursday afternoon. Markets reacted to the Trump administrationï¿½ announcement of approximately $50 billion worth of yearly tariffs on Chinese imports. (Photo by Drew Angerer/Getty Images)

NEW YORK, NY - MARCH 22: Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) ahead of the closing bell, March 22, 2018 in New York City. The Dow Jones industrial average closed down more than 700 points on Thursday afternoon. Markets reacted to the Trump administrationï¿½ announcement of approximately $50 billion worth of yearly tariffs on Chinese imports. (Photo by Drew Angerer/Getty Images)

NEW YORK, NY - MARCH 22: A monitor displays the day's final numbers on the floor of the New York Stock Exchange (NYSE) ahead of the closing bell, March 22, 2018 in New York City. The Dow Jones industrial average closed down more than 700 points on Thursday afternoon. Markets reacted to the Trump administrationï¿½ announcement of approximately $50 billion worth of yearly tariffs on Chinese imports. (Photo by Drew Angerer/Getty Images)

NEW YORK, NY - MARCH 22: Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) ahead of the closing bell, March 22, 2018 in New York City. The Dow Jones industrial average closed down more than 700 points on Thursday afternoon. Markets reacted to the Trump administrationï¿½ announcement of approximately $50 billion worth of yearly tariffs on Chinese imports. (Photo by Drew Angerer/Getty Images)

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Major industrials slumped. Plane maker Boeing Co lost 5.2 percent, Caterpillar Inc dropped 5.7 and 3M Co lost 4.7. The three were among the biggest drags on the Dow Jones Industrial Average. The S&P industrials sector plunged 3.28 percent.

The Dow Jones Industrial Average fell 724.42 points, or 2.93 percent, to 23,957.89, the S&P 500 lost 68.24 points, or 2.52 percent, to 2,643.69, and the Nasdaq Composite dropped 178.61 points, or 2.43 percent, to 7,166.68.

The losses marked the biggest daily percentage drop for each of the major indexes since Feb. 8, when the Dow and S&P confirmed a market correction from their Jan. 26 highs.

Selling was broad, with only the defensive utilities 0.44on the plus side, up 0.44 percent, out of 11 major S&P sectors.

The CBOE Volatility Index, the most widely followed barometer of expected near-term volatility in the S&P 500, finished up 5.48 points at 23.34, its highest close since Feb. 13.23.34

U.S. treasury prices gained as investors sought out safe havens. Benchmark 10-year notes last rose 23/32 in price to yield 2.8244 percent, from 2.907 percent late on Wednesday.

The drop in yields weighed on financial stocks, which were down 3.70 percent, making them the worst performing of the major sectors.

Another decline in shares of Facebook Inc, down 2.7 percent, continued to weigh on the broader market and the tech sector, the best performing S&P group for this year. The S&P technology index fell 2.69 percent on fears of greater regulation in the wake of the Facebook data leak.

Facebook Chief Executive Mark Zuckerberg said he was open to additional government regulation and happy to testify before the U.S. Congress.

AbbVie Inc tumbled 12.8 percent after the drugmaker said it would not seek accelerated approval for its experimental lung cancer treatment based on results from a mid-stage study.

Declining issues outnumbered advancing ones on the NYSE by a 4.51-to-1 ratio; on Nasdaq, a 4.09-to-1 ratio favored decliners.

The S&P 500 posted three new 52-week highs and 19 new lows; the Nasdaq Composite recorded 36 new highs and 59 new lows.

Volume on U.S. exchanges was 7.77 billion shares, compared to the 7.17 billion average for the full session over the last 20 trading days.